Almost Family Expects $3 Million Income Loss from Hurricanes
Almost Family (Nasdaq: AFAM) expects recent hurricanes will negatively impact its financial results, with up to $3.5 million in lost income expected for the third quarter.
The Louisville, Kentucky-based home health provider currently has 332 branch locations in 26 states, and 66 of those operating locations are in Florida. The Florida locations—which included home health, hospice, personal care and assessment business units—all “experienced a substantial period of disruption” due to Hurricane Irma, according to a Monday press release.
Additionally, Almost Family experienced business interruptions in Texas due to Hurricane Harvey and in Georgia due to Hurricane Irma. Disruption to normal business levels began prior to each storm actually hit the affected areas, the company said. Also, many of the company’s impacted business units operated below pre-storm levels for “elongated periods of time” as community and health care delivery system recovery efforts occurred.
“While our organization has endured hurricanes in the past, these two storms were somewhat unprecedented in the scope of geography and the extent of the disruption they caused,” Almost Family CEO William B. Yarmuth said in a prepared statement. “Our management team and staff responded exceptionally well, doing everything humanly possible to ensure that patients’ needs were appropriately triaged and their needs were met as promptly as the situation would allow.”
Almost Family does expect that the hurricanes will negatively impact its quarterly performance.
Presently, the company anticipates that these hurricanes and the associated interruptions to management focus, when combined with seasonal business lows, could reduce income by between $3 million and $3.5 million in the third quarter of 2017. That’s before taxes, depreciation and amortization, and several other factors.
Also, it is possible that they could have a residual impact on Almost Family’s fourth quarter results, the company noted.
At the same time, in its fourth-quarter 2017 results, Almost Family anticipates reporting between $2 million and $2.4 million of Medicare Shared Savings Program success fees under ACO contracts for the 2016 performance year. Almost Family’s ACO enablement subsidiary has partnered to submit applications for 18 new ACOs for the 2018 program year, a number that is higher than the total ACOs now under management.
Almost Family also expects meaningful operational efficiency gains related to its Homecare Homebase implementation to be partially reflected in its fourth quarter 2017 results and fully reflected in its full-year 2018 results. There will be no active Almost Family patients left in any predecessor systems by the end of this November, the company added.
As of Monday afternoon, Almost Family’s share price had fallen 5.63% to $47.75.
Written by Mary Kate Nelson